25) In the figure above, the demand curve shifts rightward from D0 to D1 so
25) ______
that D1 is the relevant demand curve. Suppose the government imposes
a rent ceiling of $300 per month. In the short run there will be a
A) an increased number apartments rented.
B) an elimination of a black market.
C) a deadweight loss created.
D) a reduction in renters' search activities.
26) If demand is perfectly elastic, a sales tax is paid by
A) only the buyers.
B) both the buyers and sellers.
C) only the sellers.
D) None of the above answers is correct.
26) ______
27) In the absence of a minimum wage, a decrease in the demand for lowskilled labor will ________ the wage rate when the supply of low-skilled
labor is ________.
A) raise; inelastic
B) lower; perfectly elastic
C) lower; inelastic
D) raise; perfectly elastic
27) ______
Labor
demanded
(millions of
workers
4
5
6
7
8
Labor
supplie
d
(million
s of
worker
s)
6
5
4
3
2
Wage
rate
(dollars
per
hour)
7
6
5
4
3
28) In the table above, what is the equilibrium wage rate in an unregulated
market?
A) $7.00 per hour
B) $4.00 per hour
C) $6.00 per hour
D) $5.00 per hour
28) ______
29) Suppose the demand for wine is elastic and that initially 5 million
bottles of wine are produced and consumed in the United States. If the
government levies an excise tax of $2 per bottle of wine, the government
will collect
A) less than $10 million in tax revenues.
B) more than $10 million in tax revenues.
C) $10 million in tax revenues.
D) an amount that may be more than, equal to, or less than $10
million in tax revenues depending on the precise elasticity of
demand.
29) ______
30) In the above figure, if the minimum wage is set at $8 per hour, the level
of unemployment is ________ hours per week is
A) 30 million
B) 0
C) 20 million
D) 40 million
30) ______
31) When an effective minimum wage is introduced, the number of hours of
labor employed is determined by the ________ and the ________.
A) supply of labor; minimum wage
B) demand for labor; supply of labor
C) demand for labor; minimum wage
D) supply of and demand for labor; the minimum wage
31) ______
32) A price floor
A) always results in a shortage.
B) results in a shortage if the floor price is greater than the
equilibrium price.
C) always results in a surplus.
D) results in a surplus if the floor price is greater than the equilibrium
price.
32) ______
33) In the figure above, if the minimum wage is $2 per hour, then
A) the quantity of labor supplied is 4 million hours and the quantity
of labor demanded is 2 million hours.
B) the quantity of labor supplied is 3 million hours and the quantity
of labor demanded is 3 million hours.
C) unemployment is 1 million hours.
D) the quantity of labor demanded is 4 million hours and the quantity
of labor supplied is 2 million hours.
33) ______
34) To help pay for the cost of sport related injuries, the government
imposes a tax on sellers of all sports equipment. The sports equipment
consumers' share of this tax would be greater than that shown in the
above figure
A) only if the demand was more elastic.
B) if either the demand was more inelastic or the supply more elastic.
C) only if the supply was more elastic.
D) only if the demand was more inelastic.
34) ______
35) The government sets a price floor for corn which is effective. As a result,
________.
A) a deadweight loss will be created.
B) a shortage of corn will be created.
C) the corn market will be efficient.
D) None of the above answers is correct.
35) ______
36) In the above figure, a rent ceiling of $500 per month would
A) raise the rent and cause a surplus.
B) create a shortage.
C) reduce the rent and create a surplus.
D) not affect the equilibrium quantity.
36) ______
37) A price ceiling ________.
A) is necessary to maintain market equilibrium
B) is more effective when it is higher
C) makes it illegal to charge a higher price than specified
D) occurs in housing markets only
37) ______
38) In the figure above, imposing a tax on the product results in a division
in which
A) the buyers and sellers pay the same amount.
B) all of the tax is paid by the sellers.
C) neither the buyers nor the sellers pay the tax.
D) all of the tax is paid by the buyers.
38) ______
39) Strong minimum wage regulations
A) are favored by owners of fast-food restaurants.
B) discourage markets from adjusting to change.
C) encourage markets to adjust to change.
D) are favored by owners of supermarkets.
39) ______
40) To help pay for the cost of sport related injuries, the government
imposes a tax on sellers of all sports equipment. Referring to the above
figure, the area that equals the tax revenue the government raises from
this tax on sports equipment is
A) P0P2ca.
B) ecd.
C) P1P2cb.
D) P1P3ed.
40) ______
41) The above figure shows the apartment market in Big City. What is the
equilibrium rent in Big City?
A) $1250
B) $1500
C) $1350
D) $1125
41) ______
42) In the above figure, the imposition of a $0.25 sales tax on sellers will
A) lower the equilibrium price paid by buyers of hotdogs by $0.25.
B) raise the equilibrium price paid by buyers of hotdogs by $0.125.
C) raise the equilibrium price paid by buyers of hotdogs by $0.25.
D) None of the above answers are correct.
42) ______
43) In the above figure, CBL is the cost of breaking the law. If the good in
the figure is made illegal and penalties are imposed on both buyers and
sellers, then its price per unit
A) will be higher than if it was not illegal.
B) cannot be compared with its price when it was legal.
C) will be the same as when it was not illegal.
D) will be lower than if it was not illegal.
43) ______
Quantit
Quantit
y
y
supplie
deman
d
ded
(firewo
(firewo
rks per
rks per
week)
week)
40
220
80
200
120
180
160
160
200
140
240
120
280
100
320
80
360
60
400
40
440
20
44) The table gives the demand and supply schedules for fireworks on the
Island of Big Bang. In the past, because many deaths have resulted from
accidents involving fireworks, the government has banned fireworks
and is enforcing the ban. A $5 a firework penalty on buyers of fireworks
and a $4 a firework penalty on sellers will reduce the number of
fireworks bought to ________ a week and the price paid by buyers will
be ________ a firework.
A) 160; $11
B) 0; an unknown amount
C) 40; $13
D) 80; $7
45) In the figure above, imposing a tax on the sellers of the product results
in a division in which
A) neither the buyers nor the sellers pay the tax.
B) all of the tax is paid by the buyers.
C) the buyers and sellers pay the same amount.
D) all of the tax is paid by the sellers.
Price
(dollars
per
firewor
k)
4
5
6
7
8
9
10
11
12
13
14
44) ______
45) ______
46) In the figure above, the demand curve shifts rightward from D0 to D1 so
46) ______
that D1 is the relevant demand curve. Suppose the government imposes
a rent ceiling of $300 per month. In the short run there will be
A) a surplus and an increase in search costs.
B) a shortage and an increase in search costs.
C) a shortage and a decrease in search costs.
D) a surplus and a decrease in search costs.
47) If demand is very inelastic, a sales tax imposed on sellers will cause the
price plus the tax paid by buyers of the good
A) to fall by almost the amount of the tax.
B) to fall by more than the amount of the tax.
C) to rise by almost the amount of the tax.
D) to rise by more than the amount of the tax.
47) ______
48) In the above figure, what is the amount of the tax per compact disc?
A) $10
B) $30
C) $40
D) $20
48) ______
49) To help pay for the cost of sport related injuries, the government
imposes a tax on sellers of all sports equipment. Using the above figure,
how much deadweight loss results from this tax on sports equipment?
A) acd
B) abd
C) ced
D) cbd
49) ______
50) In the short run, the supply of low-skilled labor tends to be
A) perfectly inelastic.
B) more elastic than in the long run.
C) perfectly elastic.
D) less elastic than in the long run.
50) ______
1)
2)
3)
4)
5)
6)
7)
8)
9)
10)
11)
12)
13)
14)
15)
16)
17)
18)
19)
20)
21)
22)
23)
24)
25)
26)
27)
28)
29)
30)
31)
32)
33)
34)
35)
36)
37)
38)
39)
40)
41)
42)
43)
44)
45)
46)
47)
48)
49)
50)
A
C
B
C
A
B
D
C
D
C
D
C
C
B
A
A
C
C
D
C
C
D
C
D
C
C
C
C
A
C
C
D
B
B
A
D
C
D
B
A
C
D
D
C
D
B
C
D
A
D